Rate hikes decrease australian housing affordability

he Reserve Bank of Australia's interest rate hikes last year put a dent in Australian housing affordability in the fourth quarter, the Housing Industry Association said on Monday.

The HIA-Commonwealth Bank housing affordability index fell by 1.8% over the December quarter to be down 10% on the same period a year ago.

"Housing affordability suffered a big hit over the course of 2010, with a clear driver being the interest rate increases in March, April, May and November," HIA chief economist Harley Dale said. "It is a positive sign for the housing industry that in 2011 the Reserve Bank has clearly signaled a period of interest rate stability.

"This situation could add to confidence and, in time, new home building activity."

Source: RTT News